6/17/2013. OVERVIEW General Information SPaRKS2 Program Framework Course Syllabus Doshie Walker...

INTRODUCTION TO SPaRKS2

Presented by:Doug Backman, Doshie Walker

6/17/2013

OVERVIEWGeneral Information

SPaRKS2 Program FrameworkCourse Syllabus

Doshie Walker

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INTRODUCTION TO SPARKS2


• SPaRKS2 is 14-sessions, 6-month long professional development program

• Designed around the CRA Body of Knowledge, meant to give an introduction to intermediate concepts of research administration: from Concept to Commercialization

• SPaRKS2 meets biweekly June 5 – December 4

• WHEN: 9am to 11am (every other Wednesday)

• WHERE: University Tower, 2nd floor training room

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• SPaRKS2 Intermediate Program is a certificate-based professional development program

• To be eligible for the SPaRKS2- Certificate of Completion

1. Attend all SPaRKS2 sessions• Only ONE session may be missed• Missed session must be completed prior to the next

scheduled SPaRKS2 session (made up within 2 weeks)

• If you miss one classroom session, you can make it up by contacting the lead presenter of that session. Arrangements will be made to either meet with that person and/or other presenter(s) of that session.

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Please use vibrate or silent mode

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• What to expect:

• SIGN IN!!! Be ON TIME!• 2 hours of instruction, with a ~10 minute break• Question/Answer period, as time allows• Followed by Advanced series in the future

• Interested in sitting for the CRA Exam?• CRA Study Group will be scheduled for

personnel interested in siting for the Dec 2013 CRA exam.

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OVERVIEW

SPaRKS2 Course Syllabus

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QUESTIONS or COMMENTS?

Contact Information:

Doshie WalkerCoordinator, Education & Training ProgramsEmail: Doshie.Walker @ UCF.eduOffice: #407-882-1115

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MODULE 2A-21: BEYOND SECTION J

Terri ValleryAssistant Director

Office of Research & Commercialization

OMB A-21 FEELS LIKE THIS:

More is better than less because if stuff is not less if there’s more less stuff then you might you might want to have some more and your parents won’t let you because there’s only a little we want more we want more like you really like it we

want more

It’s not complicated?

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SECTION A. PURPOSE AND SCOPE

Provides cost accounting principles for federally sponsored research, training, and other sponsored work

Institution sets their own cost policies that capture the cost objectives in A-21

Institutions are unique and can establish policies that best meet their mission, but still maintain adherence to A-21

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SECTION A. PURPOSE AND SCOPE

Does not apply to: Federal financing for loans, scholarships,

fellowships, traineeships when such items are based on education allowance or published tuition rates/fees

Capitation awards When “conditional exemptions” apply under

statutorily authorized consolidated planning & administrative funding – ex. HUD

When states adopt OMB A-87

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SECTION B. DEFINITION OF TERMS

Major Functions Sponsored Agreement Allocation Facilities and Administrative Cost

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SECTION B. DEFINITION OF TERMS

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B.1. MAJOR FUNCTIONS

Instruction Teaching and training activities Departmental research (no separate budget) Sponsored Instruction and Training

Established by grant, contract, or cooperative agreement

Can be either a major function or included in instruction

51.3 percent and 26 percent Max Poole / Alfred P Sloan Foundation

Implementation of 16 Professional Science Master’s programs in the State of Florida

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Organized Research University/Department Research (separate

budget) Sponsored Research

R&D funded by Federal and non-Federal sources

Training of individuals in research techniques Must use same facilities as R&D and not be

considered instruction 45 percent and 26 percent

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Other Sponsored Activities Work sponsored by Federal and non-Federal

sources that are not considered Instruction or Organized Research

Usually health service projects and community service programs

29 percent and 26 percent UCF/ Florida Commission on Community Service Improve levels of school readiness and success

in two schools in Orange County

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Other Institutional Activities Except other Major Functions, F&A Costs

and Service Centers Dorms, bookstores,

student union, theater,museum, athletics, clinics, etc.

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SECTION C. BASIC CONSIDERATIONS

How much does research cost?

1. Allowable direct costs needed for performance, and;

2. Allocable portion of allowable F&A costs,3. Less applicable credits

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ALLOWABILITY OF COSTS

What does “Allowable” really mean?

1. Must be reasonable2. Must be allocable 3. Must be given consistent treatment4. Must conform to limitations or

exclusions in A-21 or the agreement

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C.3. REASONABLE COSTS

Faculty Interpretation

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A prudent business person would have purchased this item at this price under the circumstances of the time.

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C.3 REASONABLE COSTS

1. Necessary in performance of the agreement

2. Adheres to federal and state laws/regulations

3. Arm’s length bargaining4. Consistent with institutional polices

and procedures

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Dr. Grey received an award from the U.S. Department of Transportation to study the extent and significance of wrong-way driving on toll roads. Since wrong-way drivers may go unreported, data collection included surveying frequent toll road users asking if they had seen any wrong-way driving incidents. Does the cost of a survey company seem reasonable?

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All things being equal, what if the survey company was owned by Dr. Grey’s brother? Is this still arm’s length? What policies at UCF need to be

considered?

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Dr. Rouge prepares a proposal to AFOSR for a DURIP award. The budget includes an X-ray diffraction instrument at a cost of $221,000 plus $100,000 in cost share to support research of high-temperature x-ray diffraction for thermal expansion. Dr. Rouge is familiar with a company named Bruker AXS, Inc. and, once he receives the award, he buys the instrument from that company.

What might cause an auditor to consider this an unallowable cost?

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C.4. ALLOCABLE COSTS

Assign the cost of a good or service to one or more cost objective in reasonable and realistic proportion to the benefit provided.1. Incurred solely in order to advance the

work under the sponsored agreement2. Deemed assignable, at least in part, to

the sponsored agreement3. Necessary to accomplish the objectives of

the project

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The Rules:

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Costs cannot be shifted between projects:1. To fix deficiencies caused by

overspending, or2. To avoid laws or terms of an agreement,

or3. For convenience, or4. To transfer costs sponsored by industry,

foreign governments or other sponsors to federal programs

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Dr. Silver purchases a much needed piece of specialized equipment for her research on hypertension. When preparing the purchase request, she realizes the only account with enough money is her grant for research on sleep disorders. Because both grants are funded by NSF and are funded under FDP, she charges the equipment to the sleep disorder grant.Is this appropriate? How would you allocate the cost?

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C.4 ALLOCABLE COSTS

Dr. Silver purchases a $45,000 piece of specialized equipment for her research on hypertension. This piece of equipment will also benefit her research on the linkage between high blood pressure and chronic kidney disease. She asks the department purchasing agent to charge both projects.

Can the cost be charged to both projects? How much should each be charged?

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Two methods to allocate cost 1. The Proportional Benefit Rule 2. The Interrelationship Rule

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The Proportional Benefit Rule Applies when it is possible to determine

the proportional benefit of the cost to each project. The cost is allocated according to the proportion of benefit provided to each of the projects.

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Dr. Brown has two different projects about post traumatic stress disorder that require personality tests, and the same test is used on both projects. Each test costs $200. One project will use 50 tests and the other project will use 550 tests. The total cost on the requisition is $120,000. How much should be charged to each project?

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The Interrelationship Rule Applies when it is not possible to

determine the proportional benefit to each project because of the interrelationship of the work involved. The cost is distributed on any reasonable and rational basis because the proportional benefit cannot be identified and applied to the individual projects.

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Dr. Silver purchases a $45,000 piece of specialized equipment for her research on hypertension. This piece of equipment will also benefit her research on the linkage between high blood pressure and chronic kidney disease.

Can the cost be charged to both projects? How much should each be charged?

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C.5. APPLICABLE CREDITS

Credits must be applied to the sponsored agreement Purchase discounts, educational discounts,

refunds, returns, overpayment adjustment, erroneous charges,

Service Centers When using a service center financed in whole

or in part by Federal funds, and charging a Federal sponsor for the use, rate must reflect a credit for the financing of the center

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C.6. COSTS INCURRED BY STATE AND LOCAL GOVERNMENTS

Fringe benefits are allowable Must be allocable Must follow cost accounting principles and

cost allocation plans (DS-2) Not otherwise being charged directly or

indirectly to Federal government

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C.7. LIMITATIONS ON ALLOWANCE OF COSTS

Statutory restrictions may limit ability to charge a sponsored agreement for a cost Salary caps When maximum amount permitted is less

than actual charge, the difference cannot be charged to other sponsored agreements

Fly America Act U.S. Flag Carrier

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C.7. LIMITATIONS ON ALLOWANCE OF COSTS

Turks & Caicos Airfield

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C.8. COLLECTION OF UNALLOWABLE COSTS

Discussed in future slides

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C.9. ADJUSTMENT OF PREVIOUSLY NEGOTIATED F&A COST RATES

What if F&A rate proposal includes unallowable costs in one of the pools? By law Section J Not allocable to sponsored agreements Not allowed per T&C of award

Refunds or adjustments must be made

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C.9. ADJUSTMENT OF PREVIOUSLY NEGOTIATED F&A COST RATES

Refunds or adjustments Future fiscal years – unallowable cost

removed from pool and rate adjusted accordingly

Past years – the Federal share of unallowable costs will be figured for each year and cash refunded accordingly

Current period – cognizant agency will require a refund or rate adjustment

Cognizant agency choice

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1. Must be reasonable2. Must be allocable 3. Must be given consistent

treatment4. Must conform to limitations or


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C.10. - C.14: CONSISTENCY

Report costs how you charge costs. Charge costs how you propose costs. Propose costs how you report costs. Charge as direct costs those items that

are usually treated as direct costs Include in facilities and administrative

costs those items that are usually treated as F&A costs.

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C.10: ESTIMATING, ACCUMULATING AND REPORTING COSTS

Appendix A: CAS 9905.501 – Estimating, Accumulating and Reporting Costs Proposed costs should have enough detail to be

compared to accumulated and reported costs Adherence standards determined as of date of

award Static:

1. Classification of cost as either direct or indirect 2. The indirect cost pool 3. The method of allocating indirect costs to the project

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APPENDIX A: CAS 9905.501

But why? Enhance likelihood of costs being treated

alike Helps prepare reliable proposal budgets Aids in the comparison of proposed costs

to actual costs to reported costs Key to financial control Both parties know the costs from the outset

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C.11: ALLOCATING COSTS FOR SAME PURPOSE

Appendix A: CAS 9905.502 – Allocating Costs Incurred for the Same Purpose

Costs for same purpose, in like circumstances, shall be treated the same

Two Options: Direct Indirect

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In like circumstances and for the same purpose, projects shall not be charged a direct cost that is included in facilities & administrative pool, or allocated to another project

In like circumstances and for the same purpose, projects shall not be charged as indirect cost a cost that is included as direct cost

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…let’s skip ahead

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C.14. DISCLOSURE STATEMENT

Submitted by institutions with $25M or more in the previous fiscal year

Must file an amendment when accounting practices change

Cost adjustments made if not followed Includes proposal and award

Impact on future F&A rates Repayment to Federal sponsor plus interest

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C.14. DISCLOSURE STATEMENT

Can be located on Finance & Accounting website: http://fa.ucf.edu/CG/Publications/CASB.pdf

If we don’t follow our own rules, we fall into the land of …

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http://fa.ucf.edu/CG/Publications/CASB.pdf

http://fa.ucf.edu/CG/Publications/CASB.pdf

C.12: ACCOUNTING FOR UNALLOWABLE COSTS

Three types: Unallowable Cost – costs that are not

allocable to a project Expressly Unallowable Cost – costs

specifically named and stated as unallowable

Directly Associated Cost – costs borne solely as a result of an Unallowable or Expressly Unallowable Cost

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C.12. ACCOUNTING FOR UNALLOWABLE COSTS

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Unallowable Cost Specifically not allowed per Section J Extra costs caused by not complying with

A-21 Noncompliant cost accounting practices

used to estimate, accumulate, or report costs

Increased cost from changing accounting practices

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Expressly Unallowable Costs Sponsor guidelines RFP guidelines Sponsored agreement

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Directly Associated Costs Actual unallowable cost PLUS Any incidental charges related to the

unallowable cost

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Appendix A: CAS 9905.505 – Accounting for Unallowable Costs

Once determined by Federal official dispute it shall include any other cost for same purpose under like circumstances

Check the same costs in other awards for allowability

Any charges for work not contractually authorized by scope or by project period

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APPENDIX A: CAS 9905.505 – ACCOUNTING FOR UNALLOWABLE COSTS

Allocability remains the same as allowable costs

Unallowable costs maintain their status of a direct cost or indirect cost regardless of how it was charged

Cost overruns are treated as a cumulative and not as individual cost items

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C.14. ACCOUNTING FOR UNALLOWABLE COSTS

“But Terri,” you say, “Unallowable per Section J? That’s no problem. I’ll

just process a CAS exemption!”

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EXHIBIT C:

Note the title:

Examples of “major projects” where direct charging of administrative or clerical staff salaries may be appropriate.

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EXHIBIT C: MAJOR PROJECTS

“It would be inappropriate to charge the cost of such activities (F&A cost pool items) directly to specific sponsored agreements if, in similar circumstances, the costs of performing the same type of activity for other sponsored agreements were included as allocable costs in the institutions F&A cost pool.”

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Does it qualify as a major project? Yes, continue on with form No,

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But what about local telephones or postage or software or printing, or … or … or

Is the cost: Allowable Allocable Reasonable

Propose and charge it as a direct cost The more we use CAS Exemption the more

we are deviating from our reported practices

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SECTION D: DIRECT COST

Must be specifically identifiable with a particular project

Consistency! Direct or F&A Same purpose and like circumstance

Identification with the work, not the type of cost is the distinguishing factor between direct and F&A

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SECTION E: F&A COSTS

Costs incurred for common or joint objective that cannot be readily and specifically identified with a particular project.

Section E includes: Criteria for distribution Selection of a distribution method Order of distribution

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SECTION F: IDENTIFICATION AND ASSIGNMENT OF F&A COSTS

Discusses the pools Depreciation and use allowance Interest on debt (certain buildings,

equipment and capital improvements) Operation and maintenance expenses General administration and general

expense Departmental administration expense Sponsored project administration

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SECTION G: DETERMINATION AND APPLICATION OF F&A COST RATE OR RATES Discusses cost pool, different rate

types, and the negotiation and approval of the F&A Interesting Note:

G.2 Defines MTDC in the distribution basis G.7 Initial F&A rate holds the for life of award.

“Life” is competitive portion G.7 Last rate stands until renegotiated G.8. Standardizes the “A” at 26 percent MTDC

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SECTION H: SIMPLIFIED METHOD FOR SMALL INSTITUTIONS

Less than $10 million federal funding per fiscal year

Salaries & Wage base or Simplified MTDC base

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SECTION I:

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SECTION J: GENERAL PROVISIONS FOR SELECTED ITEMS OF COST

Establishes the allowability of certain items Applies irrespective of whether cost is a

direct or indirect cost Exclusion of an item does not meet it’s

unallowable Allowability is based on treatment for similar or

related costs Discrepancy? Sponsored agreement always

governs

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I PROMISE ….

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SECTION K: CERTIFICATION OF CHARGES Required certification by authorized

official for financial reports and invoicing: “I certify that all expenditures reported (or

payment requested) are for appropriate purposes and in accordance with the provisions of the application and award documents.”

Includes specific certification for DS-2 educational institutions regarding F&A cost proposal

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EXHIBIT A:

List of Colleges and Universities Subject to Section J.14.h of Circular A-21

Largest recipients of Federal R&D Must retain the portion of F&A for

depreciation or use from Federal sponsored agreements at full indirect cost rate

Within next five years, that must be spent to repair, renovate, improve, purchase or liquidate the principal debts of research facilities

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EXHIBIT B:

Listing of institutions that are eligible for the utility cost adjustment

Can add 1.3 percent to indirect cost rate

Prior to July 1, 1998 certain institutions were involved in special cost study Recovery of utility costs and recovery of

library costs

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THE FUTURE OF A-21

Combined into “A-81” A-110 A-21 A-87 A-122 A-133

Changes to CAS, DS-2, Equipment, Effort, Subaward monitoring, Single audit threshold, Residual inventories, and more!

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THANKS FOR JOINING US!

See you at the next session:

A-110 Uniformed Administrative Requirements for Grants and Agreements with institutions of Higher Education, Hospitals, and Other Nonprofit

OrganizationsJuly 10, 2013

9:00 am to 11:00 amORC 2nd floor large (#211)

6/17/2013. OVERVIEW General Information SPaRKS2 Program Framework Course Syllabus Doshie Walker...

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